By Greg Gerritt in
RIFuture.org
Today on the news I
heard that RI state pension funds had a return on investment of 1.5% in the
last fiscal year. Grew right along with the growth of the economy for the
1%. Rest of us fell further behind.
But what the pension
fund really fell behind on was its expected growth, the growth that allows the
fund to make payments to retirees. The official expectation for the pension
fund is growth of 7.5% each year. This is recent as previously the rate
of return expected had been close to 8%. In either case the actual return
was only 1/5 of the expected return. Adding to a long string of years in
which growth targets were missed by a wide margin.
In a place without an out of control ruling class seeking new ways to loot the populace, the state would tax the wealthy to make up the difference in the pension funds because there is a clear understanding that equalizing the wealth strengthens the economy.
But even that will not
really solve the problem that the pension funds are going to get smaller and
smaller returns over time. Not due to mismanagement, but because the
economy is going to get smaller. The stringing out of the recovery after
the bubble burst being only the latest and most abundant clue that we have
essentially reached the end of economic growth in the west, especially any
growth that actually flows into the hands of the 99%.
There are many levers
that can be pushed to create more economic growth, but the one thing economic
growth is unable to survive is ecological collapse. The loss of soils,
clean water, forests, fisheries, and biodiversity, combined with the fires,
droughts, floods, and heat waves of climate change is eating up all the actual
growth and many people are ending up poorer even if a few in the cities are
getting richer.
This is why over the
last 15 years the west has either been in the midst of some bubble or in recession.
We have gone from HI Tech and internet, to Housing and strange financial
instruments as the bubble we obsess over, but the results are the same. A
small class makes out, everyone else falls behind, and the Earth becomes a less
hospitable place with diminished life.
Rhode Island’s pension
fund is hurting even with the current “fix” and the economic shenanigans used
to grow the economy faster are a disaster (remember 38 Studios). Rhode
Island needs a new course, based on ecological healing and economic justice if
it is going to have prosperity.
Greg Gerritt is a longtime activist on the ecology/economy
interface and is associated with Friends of the Moshassuck, the Green Party,
and ProsperityForRI.com